A Glimpse into Lean Reserves Of Wheat
The Indian Food Ministry is eyeing a challenge as it anticipates its official wheat reserves, known as buffer stocks, to hit a 16-year low. Despite this looming concern, the Agriculture Ministry’s optimistic outlook on record-breaking wheat production offers hope.
The Chairman and Managing Director of the Food Corporation of India (FCI) relies on the Agriculture Ministry’s projection of 114 million tonnes of wheat production this year. However, the FCI fell short of its procurement target in the 2022-23 crop year, securing only 26.2 million tonnes out of the estimated 110.55 million tonnes. In the previous crop year, the government aimed for 107.74 million tonnes, but the FCI managed to procure only 18.79 million tonnes. Discrepancies between government estimates and industry projections have been a persistent challenge.
Depleting Reserves and Offtake Outlook
The government has offloaded about 6 million tonnes of wheat through open market sales and cooperative transactions. An additional 2.5 million tonnes are expected to be sold by February-end, surpassing the 26.2 million tonnes procured during the 2023-24 fiscal year.
The annual wheat requirement for various schemes, excluding open market sales, hovers around 18.4-19 million tonnes. As of April 1, the buffer norm for wheat is 7.46 million tonnes, with the FCI holding 8.35 million tonnes in 2023.
Acreage Deficit and Future Procurement Plans
Experts remain optimistic about procuring a substantial amount of wheat in the upcoming fiscal year, contingent on market prices and crop output. Despite a deficit in wheat acreage in certain states, he anticipates coverage in the coming days. With wheat planting slightly down from the previous year, experts further emphasize the government’s commitment to providing wheat farmers a minimum support price (MSP). The early start of wheat procurement from March 1, a departure from the usual April 1, aligns with expectations of an early harvest in many regions.
The Indian Food Ministry grapples with the prospect of its official wheat reserves hitting a 16-year low. In contrast, the Agriculture Ministry’s positive outlook on record-breaking wheat production offers hope. Procurement challenges and discrepancies in government estimates persist. Despite offloading 6 million tonnes through open market sales, the government plans to sell an additional 2.5 million tonnes, surpassing the 2023-24 fiscal year’s procurement. Experts remain optimistic about future procurement, contingent on market dynamics and crop output.